Recently I received a phone call from a concerned daughter whose 94-year-old mother had just moved to assisted living. A well-intentioned friend had convinced her that she needed to contact an elder law attorney to talk about “Medicare Estate Recovery.” The well-meaning friends had convinced the daughter that Medicare would seek reimbursement for expenses paid by the program. It wasn’t just that the friend had mixed up the names of the programs; the friend had mixed up the programs themselves.
As I told her, there is no such thing as Medicare Estate Recovery; what the well-intentioned friend was referencing is Medicaid Estate Recovery, which is the subject of a different article. The daughter’s mom was in assisted living being paid for by the proceeds of her house sale, and at 94 she was doing just fine. I assured the daughter that because the State of Texas had not spent any resources on her mom’s care, the state would not have anything to recover.
I often get calls where people have confused Medicare and Medicaid, and I’ve seen the same kinds of mistakes from other attorneys who do not practice in this area. The names are remarkably similar, but the programs are different in every way except that they are both government health programs.
First, Medicare is like private health insurance and is administered by the Social Security Administration. It is an entitlement, meaning that if you paid into the system over your years of employment, you are entitled to receive the benefit. You pay a premium based on certain individual factors, and you get coverage. You can receive additional coverage through supplemental plans as well if you choose to purchase them. There are rules about what Medicare will and will not cover and healthcare providers who either accept Medicare or do not. Every citizen is eligible at 65, younger if they have a disability determined by the Social Security Administration, and there are no income or asset requirements. A 65-year-old billionaire has just as much right to access Medicare as a 65-year-old living on a fixed income.
Medicaid is a different animal all together. The Medicaid program is operated as a partnership by the federal and state governments. Medicaid is funded by both federal and state money, but the program is administered by each state, meaning that every state’s Medicaid program is different from every other state’s Medicaid program. Medicaid offers a variety of different programs, some are means-tested, meaning income and assets are reviewed to determine qualification, some are not. Medicaid may be to persons who are blind, disabled, or elderly, as well as families, children, and pregnant women who meet the financial requirements.
The bottom line is that Medicare is a medical insurance benefit that is earned by those who have worked to pay into the system; Medicaid is a group of needs-based programs that help specific people who qualify.